On Thursday last week, the European Commission announced it had sold a further 80,400t of skimmed milk powder (SMP) from its intervention stocks for a minimum selling price of €1,555/t.

This means the European Commission has now sold 380,000t of its intervention stockpile and leaves just under 22,000t of SMP still in storage, which is a very positive signal for dairy markets in 2019.

The almost entire clearance of the European Commission’s intervention stockpile over the last 12 months means milk powder markets in Europe finally have a chance to return to some normality.

SMP spot prices from European dairy markets have risen as high as €1,880/t this week, which is the highest level in more than 18 months.

The stage is now set for SMP prices to rise even higher to €2,000/t or more in the coming months, which is a more normal price for the product.

At this week’s GDT auction in New Zealand, SMP prices jumped more than 10% to reach $2,405/t (€2,110/t), which is the strongest price in almost two years.

The GDT dairy index rose by more than 4% this week thanks to strong gains in price for both powders and fats.

The price of whole milk powder (WMP), which is the most important commodity traded on the GDT, gained 3% this week to reach $2,780/t (€2,435/t). Butter prices rose 5% to reach $4,260/t (€3,735/t), while the price of anhydrous milk fat increased 3% to $5,295/t (€4,640/t). Cheddar prices were up 4% to $3,505/t (€3,075/t).